CGS International maintains bullish view on Malakoff ahead of tenders
The brokerage stated that its outlook is underpinned by Malakoff's established track record in thermal plant development and operations, supported by its ready-to-deploy plans, sites, and assets.
'We estimate the plant extensions could generate at least RM40 million in annual net profit from 2026,' it said in a research note.
'This will be further supported by the RM950 million mini-hydro project and the RM660 million waste-to-energy (WTE) plant, which we forecast could contribute a combined RM35 million in net profit annually.'
CGS International said a potential win for a 1.4 gigawatt greenfield gas plant could add at least RM200 million in recurring annual net profit and RM1 billion in equity value, equivalent to 20 sen per share, based on its back-of-the-envelope calculations.
Together, these projects offer strong earnings visibility, backed by long-term power purchase agreements (PPAs) and concessions.
While Malakoff's share price has rebounded from its recent lows, the firm sees further upside potential, driven by a pipeline of unpriced assets, including the mini-hydro and WTE plants, its stake in E-Idaman, and potential PPA extensions for the GB3, Prai Power, and Segari plants.
'We also see Malakoff as a strong contender for new gas-fired plant contracts,' it said.
On May 10, 2025, the Energy Commission called for proposals for new gas-fired generation capacity in Peninsular Malaysia through competitive bidding, comprising two categories: (1) an expansion of existing plants and (2) development of new plants.
Malakoff has submitted bids to extend the PPAs for three of its gas plants, GB3 640 megawatts (MW), Prai Power (350 MW), and Segari (1,303 MW), through to 2029, and plans to participate in bids under Category 2.
CGS International maintained its 'Add' recommendation on Malakoff with a target price of RM1.20 per share, based on a conservative assumption of just one joint venture win. — BERNAMA
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New Straits Times
11 hours ago
- New Straits Times
Exactly 10 years later, where are Malaysia's G20 GLCs now?
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Some have grown their market presence, others have undergone restructuring and a few have seen their financials move sideways. What binds them is that most remain under the stewardship of Malaysia's five major government-linked investment companies, the Employees Provident Fund (EPF), Khazanah Nasional Bhd, Permodalan Nasional Bhd (PNB), Lembaga Tabung Angkatan Tentera (LTAT) and Lembaga Tabung Haji (TH). Leading the pack by a wide margin is Malayan Banking Bhd (Maybank), majority-owned by PNB. Maybank, Malaysia's largest bank, added nearly RM40 billion to its market capitalisation over the past ten years, growing from RM85.46 billion in 2014 to RM123.56 billion as of end-2024. The bank, which continues to be the heavyweight in both asset size and shareholder value, saw revenue climb from RM35.7 billion to RM68.9 billion, while net profit hit RM10 billion in financial year 2024 (FY2024), up from RM6.7 billion a decade earlier. Close on its heels is the country's second-largest bank, CIMB Group Holdings Bhd, whose top shareholders include Khazanah and EPF. The bank more than doubled its net profit over the period, recording RM6.98 billion in FY2024, up from RM3 billion in FY2014. Revenue grew to RM21 billion from RM14 billion, while its market cap swelled to RM88 billion from RM46.3 billion. Telekom Malaysia Bhd (TM), the country's incumbent provider of fixed broadband and enterprise network services, also saw notable gains. The Khazanah-linked firm, with EPF among its key institutional investors, reported net profit of RM2 billion in FY2024, more than double the RM831.8 million booked in FY2014. Revenue edged up to RM11.7 billion, while market capitalisation held steady at RM25.5 billion, almost unchanged from its level a decade ago. National electricity provider Tenaga Nasional Bhd (TNB), in which Khazanah holds a majority stake, recorded RM56.7 billion in revenue in FY2024, up from RM42.8 billion in 2014. During the period, TNB's net profit came in at RM4.7 billion, slightly lower than its RM6.47 billion result ten years earlier, though its market value rose to RM86.8 billion from RM69.9 billion. For Axiata Group Bhd, also part of Khazanah's stable, the story is more complex. Revenue improved from RM18.7 billion to RM22 billion, but net profit declined to RM946 million in FY2024 from RM2.3 billion in 2014. Its market capitalisation shrank to RM22.9 billion from RM60.5 billion. Sime Darby Bhd, a flagship of PNB's portfolio, reported revenue of RM67 billion in 2024, up from RM44 billion a decade earlier. Net profit was largely flat at RM3.3 billion versus RM3.35 billion previously. However, following the group's 2017 demerger, which saw its plantation and property businesses spun off into separate listed entities, Sime Darby's market capitalisation now stands at RM16.1 billion, compared to RM58.6 billion before the split. Bank Islam Malaysia Bhd, formerly listed under BIMB Holdings Bhd and tied to TH, posted revenue of RM4.7 billion in 2024, compared with RM2.97 billion in FY2014. Net profit rose slightly to RM569 million from RM532 million. Market capitalisation, however, eased to RM5.6 billion from RM6 billion over the same period. Affin Holdings Bhd, which falls under LTAT's control, recorded RM2.17 billion in revenue and net profit of RM509.7 million in 2024. Both figures were down from FY2014 levels of RM3.08 billion and RM605 million, respectively. Despite the dip in performance, its market cap rose to RM6.99 billion, up from RM5.64 billion. MBSB Bhd, majority-owned by EPF, saw revenue climb from RM2.6 billion to RM3.7 billion. Net profit, however, fell to RM406.7 million in FY2024 from RM1 billion in 2014. Market capitalisation also edged down to RM6.08 billion from RM6.2 billion. Malaysian Resources Corp Bhd (MRCB), another EPF-linked company, reported flat revenue of RM1.6 billion in 2024, compared to RM1.5 billion in 2014. Net profit fell to RM63.67 million from RM152.6 million, although its market capitalisation rose modestly to RM2.35 billion from RM1.8 billion. TH Plantations Bhd, a subsidiary of TH, reported RM877.7 million in revenue and RM75 million in net profit for 2024, both improvements over its RM488.9 million revenue and RM48 million profit in 2014. However, its market cap more than halved, falling from RM1.5 billion to RM602 million. As these companies continue to navigate changing economic tides, their financial trajectories offer a glimpse into how Malaysia's GLC landscape has evolved since the 10-year transformation programme formally ended. Several others from the original G20 cohort have exited the market entirely. Proton Holdings Bhd was sold by Khazanah to DRB-Hicom and subsequently delisted, while Pos Malaysia Bhd was also divested to DRB-Hicom but remains listed. Boustead Holdings Bhd was taken private by LTAT. Malaysian Airline System Bhd, Malaysia Airports Holdings Bhd and UEM Group Bhd were all privatised. UMW Holdings Bhd was acquired by Sime Darby in 2023 and Chemical Company of Malaysia Bhd was absorbed into Batu Kawan Bhd.
The Star
12 hours ago
- The Star
Malakoff set for earnings upside
PETALING JAYA: Malakoff Corp Bhd has submitted bids under the Energy Commission's (EC) competitive tender launched in May 2025, seeking to extend the power purchase agreements (PPAs) for three of its gas-fired power plants, totalling 2.3GW, through to 2029. The independent power producer also plans to bid for new greenfield plants under the EC tender on top of 2.8GW of initial letters of notification already secured for two new gas-fired power plants, CGS International (CGSI) Research said in a report. Recall that on May 10, 2025, the EC had launched a request for proposal for new gas-fired power generation capacity in Peninsular Malaysia via a competitive bidding exercise, comprising two categories. One was for existing facility or additional capacity, while the second was for the development of new gas-fired power plants. The country has not conducted a thermal power plant tender in over a decade as reserve margins have consistently remained robust at above 30%. But a sharp rise in power demand is expected following a wave of industrial and data centres investments approvals. CGSI Research believes Malakoff is well-positioned to secure wins from the upcoming tender, considering the urgent need to maintain supply stability and reserve margins amid surging power demand, its proven track record in thermal plant development and operations and the availability of ready plans and sites/assets. 'We estimate the plant extensions can generate at least RM40mil in net profit annually from 2026. 'This will be further supported by its circa RM950mil mini hydro project and RM660mil waste-to-energy (WTE) plant, which we project can contribute a combined RM35mil in annual net profit,' the research house said in a report. Additionally, it said a potential 1.4GW greenfield gas plant win from financial year 2030 could mass at least around RM200mil in recurring annual net profit and RM1bil in equity value based on CGSI Research's back-of-the-envelope calculations. While the stock has rebounded from its lows, CGSI Research believes there is further upside, underpinned by a pipeline of unpriced assets, namely its mini hydro and WTE plants, stake in E-Idaman Sdn Bhd and possible extensions for its expired or expiring plants. 'Hence, we retain our 'add' call. Our target price of RM1.20 conservatively assumes just one joint-venture win. 'All in, we estimate these opportunities are worth at least RM1.2bil or around 25 sen per share, value that is not yet fully priced in at current price levels.' Valuation-wise, the stock is trading at 5.2 times expected 2026 earnings and offers net dividend yield of 5.5%. According to the research firm, Malakoff's earnings are poised for an inflection from 2026, driven by improving plant performance and the addition of new renewable energy and thermal capacities. CGSI noted that prior to 2023, Malakoff's power assets, in particular its coal plants, had suffered operational setbacks due to boiler and turbine issues. This affected the plants' equivalent availability factors (EAF) and output levels. However, performance has improved noticeably in recent quarters with EAF showing signs of greater stability, it added. At the time of writing, shares of Malakoff were trading at 91 sen, up 7.1% year-to-date.
Malaysian Reserve
3 days ago
- Malaysian Reserve
CGS International maintains bullish view on Malakoff ahead of tenders
CGS International Securities Malaysia Sdn Bhd remains positive on Malakoff Corporation Bhd, citing its strong position to secure upcoming Energy Commission tenders amid rising power demand and the urgent need to ensure supply stability and reserve margins. The brokerage stated that its outlook is underpinned by Malakoff's established track record in thermal plant development and operations, supported by its ready-to-deploy plans, sites, and assets. 'We estimate the plant extensions could generate at least RM40 million in annual net profit from 2026,' it said in a research note. 'This will be further supported by the RM950 million mini-hydro project and the RM660 million waste-to-energy (WTE) plant, which we forecast could contribute a combined RM35 million in net profit annually.' CGS International said a potential win for a 1.4 gigawatt greenfield gas plant could add at least RM200 million in recurring annual net profit and RM1 billion in equity value, equivalent to 20 sen per share, based on its back-of-the-envelope calculations. Together, these projects offer strong earnings visibility, backed by long-term power purchase agreements (PPAs) and concessions. While Malakoff's share price has rebounded from its recent lows, the firm sees further upside potential, driven by a pipeline of unpriced assets, including the mini-hydro and WTE plants, its stake in E-Idaman, and potential PPA extensions for the GB3, Prai Power, and Segari plants. 'We also see Malakoff as a strong contender for new gas-fired plant contracts,' it said. On May 10, 2025, the Energy Commission called for proposals for new gas-fired generation capacity in Peninsular Malaysia through competitive bidding, comprising two categories: (1) an expansion of existing plants and (2) development of new plants. Malakoff has submitted bids to extend the PPAs for three of its gas plants, GB3 640 megawatts (MW), Prai Power (350 MW), and Segari (1,303 MW), through to 2029, and plans to participate in bids under Category 2. CGS International maintained its 'Add' recommendation on Malakoff with a target price of RM1.20 per share, based on a conservative assumption of just one joint venture win. — BERNAMA
